We designed the CortexDAO tokenomics to foster DAO growth and reward CXD lockers, those most committed to the long-term vision of the protocol. We set four goals to maximize value for CXD lockers:
- Encourage and reward DAO participation.
- Encourage CXD buy pressure.
- Encourage locking.
- Decrease sell pressure.
The result was CortexDAO’s deflationary token flywheel.
Deflationary Token Flywheel
A user who purchases and locks CXD can earn idxCVX. Similarly, a user who purchases and stakes idxCVX can earn CXD. This creates tokenomics that are sustainable and deflationary.
Locked CXD earns idxCVX from fee distributions. Staked idxCVX earns CXD rewards.
- Users buy CXD.
- Users lock CXD to earn vlCXD. This reduces the circulating supply.
- Users earn idxCVX from fee distribution.
- Users stake idxCVX to earn CXD.
- Users lock their newly earned CXD to repeat the cycle.
Fee Distribution
- The Convex Index collects a 15% fee on harvested rewards as the main revenue stream.
- A portion of revenue is used to cover protocol expenses such as deployment, staking, harvesting, and claiming.
- All profits are then distributed to vlCXD holders as 3CRV.*
- Users can redeem 3CRV for USDC, USDT, or DAI from Curve’s 3pool.
*Once the Convex Index token (idxCVX) is launched, profits will be distributed in idxCVX.
Boosted Index Rewards
Once idxCVX is released, vlCXD will boost idxCVX staking rewards.
- Users buy idxCVX to gain exposure to the Convex Index.
- Users buy and lock CXD to earn vlCXD.
- Users earn CXD from boosted idxCVX staking rewards.
Governance
vlCXD will be used to create and vote on DAO proposals. A soon-to-be-released DAO constitution will define the proposal process.
Token Glossary
- CXD: The tradable CortexDAO token, currently available on Curve.
- vlCXD: The locked CortexDAO token.
- idxCVX: The tradable Convex Index token.
